Central bank purchases of gold rose by 42 percent year-on-year during the third quarter of 2026, reaching 321 tons, recording the highest quarterly level since the fourth quarter of 2024, at a time when flows returned strongly to gold-backed ETFs, amid continuing geopolitical risks and concerns about financial discipline.
The “Gold Demand Trends” report issued by the World Gold Council, on Tuesday, showed that the total global demand for the yellow metal reached 1,369 tons during the third quarter, a slight decrease of 1 percent compared to the same period last year. However, the total value of demand rose by 22 percent to $188 billion, driven by an increase in the average price of gold to $4,262 per ounce.
Central banks and official institutions remained among the most prominent sources of demand, as their net purchases amounted to 321 tons during the quarter, while their total purchases since the beginning of the year increased to 675 tons, an increase of 6 percent on an annual basis. The Council noted that diversification of investment portfolios and risk management remain among the most prominent factors supporting central banks’ retention of gold and enhancing their reserves of it.
In the investment market, ETFs backed by physical gold attracted 211 tons during the third quarter, bringing their flows close to the strong levels recorded in the same period in 2025, with a difference of only 6 percent. These flows pushed the funds' total holdings to a record level of 4,256 tons, after the shift witnessed in flows during the second quarter.
Demand for gold through over-the-counter transactions and other sources also rose to 143 tons, compared to 101 tons during the third quarter of last year, although it remained below the high levels recorded earlier in the year.
On the other hand, individual investment demand for gold bullion and coins declined by 19 percent on an annual basis, to 268 tons, with some investors reluctant to buy in light of the lack of clarity in the price trend. China was one of the most prominent markets that recorded a performance contrary to this trend, with demand increasing by 7 percent.
The impact of the rise in gold prices extended to the jewelry sector, as global demand for it decreased by 17 percent to 313 tons, with consumers tending to buy lighter and lower-caliber jewelry. Despite the decline in quantities, the total value of demand for gold jewelry rose to $43 billion.
Artificial intelligence supports technological demand
In terms of industrial uses, demand for gold in the technology sector increased by 3 percent year-on-year, reaching 85 tons, recording the highest quarterly level since the fourth quarter of 2021. Demand in the electronics sector also increased by 5 percent to 72 tons, supported by manufacturing growth related to artificial intelligence applications.
On the supply side, total gold supplies reached 1,369 tons during the third quarter, down 1 percent year-on-year. While mine production rose by 3 percent to a quarterly record level of 1,071 tons, gold recycling fell by 8 percent to 314 tons, recording its lowest levels since the fourth quarter of 2023, despite the rise in prices.
Louise Street, chief market analyst at the World Gold Council, said that demand for gold witnessed mixed performance during the third quarter, with flows returning strongly to exchange-traded funds backed by the yellow metal, driven by geopolitical risks and concerns related to financial discipline, which enhanced the interest of institutional investors.
She added that individual investors showed reluctance to buy due to the lack of clarity in expectations regarding the path of prices, while central banks continued to play a pivotal role in supporting demand, with notable purchases from official institutions continuing.
Regarding market expectations until the end of the year, Street indicated that gold’s prospects appear balanced, explaining that rising interest rates and varying inflation expectations may constitute pressure factors on the yellow metal, while geopolitical risks and tensions in financial markets can enhance investors’ orientation towards gold as a haven for stability.
Goldman Sachs raised its forecast for natural gas prices in Europe during the year 2027, in light of the continued uncertainty regarding market prospects, amid risks related to liquefied natural gas supplies from the Middle East and the possibility of temperatures falling below their usual levels during the winter.
The bank raised its forecast for the price of European gas in the first quarter of 2027, according to the Dutch TTF index, to 74 euros per megawatt-hour, compared to 44 euros in its previous estimates. He also increased his expectations for the average price during the entire year to 51 euros per megawatt-hour, compared to 32 euros previously, according to Reuters.
Goldman Sachs estimated that the markets are taking into account a 47 percent possibility of a continued decline in liquefied natural gas supplies from the Middle East during the current winter, coinciding with recording temperatures below seasonal averages.
The bank said in a note issued on Monday that some of the risks that may push prices to rise have already been calculated in the markets, but the recent decline in liquefied natural gas flows through the Strait of Hormuz reinforces the need for hedging in anticipation of scarcity of supplies during the European winter.
He added that the deviation of temperatures in northwestern Europe from their seasonal average may lead to a change in the regional demand for gas, equivalent to 12 percent of the available storage capacity.
Although LNG supplies from the Middle East exceeded expectations in October, gas tanker traffic remains volatile, while estimated flows of LNG through the Strait of Hormuz have not recovered at the same pace as oil flows.
In an indication of the continuing security risks in the region, data monitoring maritime security incidents showed that October was the month with the most recorded attacks on commercial ships in the Strait of Hormuz and adjacent waterways.
On the other hand, the standard Dutch gas contracts for delivery next month at the TTF Center fell by more than 10 percent, on Monday, to reach 10.77 euros per megawatt-hour, amid growing hopes for an end to the US-Israeli war, driven by the continuation of mediation talks, despite the continuing attacks on ships in the region.
